Improving smallholder livelihoods and ecosystems through direct trade relations: High‐quality cocoa producers in Ecuador

Abstract

Global trade in niche commodities has increased the influence of consumers' choices on land use change and livelihoods in developing rural areas. New niche commodity markets for fine cocoa—produced by old tree varieties frequently grown in shaded agroforestry systems—create more direct linkages between producers and buyers. We explored the socioeconomic and environmental outcomes for cocoa smallholders that participated in direct trade relations compared with smallholders that sold through mainstream markets. Household interviews were conducted with cocoa smallholders in northern Ecuador. Biodiversity conditions at farm level were monitored for 75% of surveyed households. Using a counterfactual based on genetic matching, we found that smallholders engaged in direct trade (a) captured superior prices for cocoa sales; (b) had greater access to agricultural training, technical assistance, and improved social networks; and (b) applied more nature‐friendly management practices, compared with smallholders selling through mainstream markets. However, a strong overlap between direct trading practices and organic certification made attribution of environmental benefits difficult. This overlap likely explained why farmers engaged in direct trade used more organic fertilizers and less herbicide. Shade level and plant species richness and abundance in plantations were unrelated to market participation. Additional qualitative analyses suggest that certification facilitates engagement in direct trade and that some direct buyers request certification. This study provides insights on the potential of developing value chain innovations for high‐quality commodity trade. The success of value chain innovations hinges on the competitiveness of farmers' cooperatives and involvement of governments, nongovernmental organizations, and private actors.

Monitoring of cocoa post-harvest process practices on a small-farm level at five locations in Ecuador

“…Farmers grow, harvest, ferment, and dry the cocoa beans in a non-industrialized way without controlling the processing conditions ( Muñoz et al., 2019 ; Saltini et al., 2013 ). In Ecuador, the individual farmers sell the beans partially fermented or partially or fully dried to local intermediaries where, if necessary, they are fermented or dried to the end before selling to exporters ( Middendorp et al., 2020 ). The varying post-harvest practices combined with the mixing of beans originating from different process stages and various farmers and intermediaries result in very heterogeneous batches of cocoa beans favoring low quality ( Muñoz et al., 2019 ; Saltini et al., 2013 ).…”

The nature of fair trade exchanges and their outcomes: Producer voices in Vietnam and India

“…Such conflation might be expected given that in the small producer model, the Fairtrade standard explicitly works through democratically organized and farmer‐led groups and its theory of change refers to producer organization support as a core input (Fairtrade International, 2019) and strengthened farmer organizations and ability to represent members are recognized as an output of Fair Trade exchanges (Tyszler, Quiroga, Audet‐Belanger, et al, 2018). For both the Fairtrade model and effective cooperatives, good governance structures, the ability of farmers to exercise their voice and an effective balance of social and economic objectives are key to success (Hannan, 2014; Middendorp, Boever, Rueda, et al, 2020).…”

A framework to understand the social impacts of agricultural trade

“…Access to resources is mediated by the rules and regulations set by institutions and organisations as part of the wider governance systems (Scoones, 2015). For example, the effects of coffee and cocoa certification are often expressed in terms of changes in capitals (Haggar et al, 2017;Ingram, Van Rijn, Waarts, & Gilhuis, 2018;Luna & Wilson, 2015;Middendorp et al, 2020;Morel et al, 2019).…”